LONDON (Alliance News) - Providence Resources PLC Thursday said it has identified two oil seeps close to its wholly owned Polaris oil prospect in the Rathlin Basin, offshore Northern Ireland, which may link up with its nearby Ballinlea oil discovery.
As a result, the Irish based oil and gas exploration company said it has relinquished the majority of its license to focus on what it deems to be the most prospective area of the license.
Providence conducted an assessment of satellite oil seep data acquired over the P1885 license which revealed the presence of two large seeps 3.5 kilometres north-west of the Polaris prospect.
An oil seep is a natural spring where liquid and gaseous hydrocarbons leak directly out of the ground at surface. These two oil seeps appear to be related to faulting and may provide direct evidence of active oil migration from potential lower carboniferous source rocks, the company said.
"We believe that the presence of naturally occurring surface seeps confirms that oil generation and migration from depth is occurring within our Rathlin Basin exploration licence area," said Technical Director John O'Sullivan.
"As part of its licence commitments and to minimize ongoing costs, Providence has relinquished 70% of P1885, retaining what it considers to be the most prospective area over the Polaris prospect," the company added.
Separately, appraisal well planning is ongoing on the Rathlin Energy-operated Ballinlea oil discovery, which is located in the adjacent onshore exploration licence to the P1885.
The Polaris structure is thought to be linked with the Ballinlea discovery and therefore the results from the appraisal well will be "important in relation to future drilling activities in P1885", Providence said.
"The future drilling activity planned for the onshore Ballinlea oil discovery should only further enhance the exploration potential of this basin in general and our offshore licence in particular," said O'Sullivan.
Providence shares were down 1.4% to 29.83 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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